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Euro Decline Causes Problems for Seafood Traders

Sustainability Economics +3 more

VIET NAM - Recent falls in the value of the euro have been concerning Vietnamese fish exporters into the EU.

Lucy Towers thumbnail

The value of the euro is at a 12-year low, causing troubles for seafood companies in Viet Nam, reports VASEP.

On the morning of the 16 March 2015, in Tokyo, Japan, 1 euro was traded at $1.0451, which means a loss of 25 per cent within a year.

The euro started to depreciate from mid-2014 and the value against US dollars fell sharply from December 2014.

Due to the volatility of the euro, many seafood companies have had difficulties in signing new contracts to export to EU. A business in Ho Chi Minh City complained of slow feedback from European partners due to exchange rate fluctuations.

A pangasius company in Tien Giang province also revealed that importers only signed agreements if goods were sold at discount.

Currently, pangasius export price to European market is at its lowest of $2.6/kg. In order to create 1kg of pangasius fillet, it takes 3kg of raw fish. The price of raw material is relatively high, so if the price is reduced by only 10-12 cents per kg, companies will lose money.

The uncertainty of European market has caused some companies to look at expanding into other markets such as the US, Japan, Korea and the Middle East.